ArtsATL > Art+Design > Opinion: the economic advantage of embracing Atlanta’s history

Opinion: the economic advantage of embracing Atlanta’s history

Rehabilitation efforts, such as those with Krog Street Market, are much more impactful than merely creating a convenient place to shop.

Krista Dumkrieger has worked as an Associate Architect at Cooper Carry since 2015. As a Project Architect in the Mixed Use Specialty Practice Group, she is responsible for coordinating the needs of the designers, technical staff, independent consultants, engineers and landscape architects. Krista graduated magna cum laude from the University of Notre Dame with a bachelor’s degree in Architecture. She is a registered architect, active within the American Institute of Architects (AIA), a Leadership in Energy and Environmental Design Accredited Professional, and member of the International Living Future Institute (ILFI).

__

With the mayoral race in Atlanta heating up, certain issues facing Atlanta are coming to the forefront, especially historic preservation. Candidates were faced with this topic at the Vision for Atlanta panel on April 20, and while all the candidates present articulated the need for a stronger Urban Design Commission (UDC) with a broader scope of powers, there wasn’t an opportunity to have a larger conversation about some of the common misconceptions about historic preservation, and why it is such an important topic for a future mayor.  

Many understand historic preservation as keeping a historic building the same, or returning it to its original state. However, there are actually four different levels of preservation as defined by the Secretary of the Interior’s Standards and Guidelines.  

Reconstruction — the act or process of depicting, by means of new construction, the form, features and detailing of a non-surviving site, landscape, building, structure or object for the purpose of replicating its appearance at a specific period of time and in its historic location.

Restoration — the act or process of accurately depicting the form, features and character of a property as it appeared at a particular period of time by means of the removal of features from other periods in its history and reconstruction of missing features from the restoration period. 

Preservation — the act or process of applying measures necessary to sustain the existing form, integrity and materials of a historic property.

Rehabilitation — the act or process of making possible a compatible use for a property through repair, alterations and additions while preserving those portions or features which convey its historical, cultural or architectural values.

While preservation most closely aligns with the common understanding of what we know about historic preservation, the majority of projects actually fall under rehabilitation efforts — for example, Ponce City Market and Krog Street Market, historic buildings that are adapted for a new use or purpose, that contribute to a vibrant, thriving neighborhood.

Ponce City Market from North Avenue. (Photo by David Hamilton.)

But it’s key to look at historic preservation efforts as more than merely providing a convenient and unique place to shop, live or work. They also can be catalysts for profound economic benefit in the city.

According to Rutgers Annual Report on the Economic Impact of the Federal Historic Tax Credit for FY 2015, in most of the country, investments in historic rehabilitation yield “better effects on employment, income, GSP and state and local taxes than an equal investment in new construction or many other economic activities (e.g., manufacturing or services.)” In Georgia alone, these types of projects created 915 new jobs, $32.2 million in income and $4,308 in state and local taxes in 2015.

Historic preservation projects also contribute to Georgia’s flourishing heritage tourism industry. While Georgia is the eighth most visited state in our country, it ranks fifth for heritage tourists. In 2011, it was estimated that these heritage tourists spent over $6 billion in Georgia, supporting 117,000 jobs, and contributed toward more than $461 million in state and local taxes.

The Fox Theatre itself was saved from demolition in the ’70s; now it helps preserve other historic theaters.

A great example is the Fox Theatre, which was rescued from demolition in 1975. While it has undergone over $20 million in restoration projects, the venue is now booked about 325 nights a year, and generates millions of dollars for the local economy through the over 750,000 visitors it attracts every year. It should be noted that only 3% to 7% of expenditures go to the assets that attracted these heritage tourists; the remainder goes to the restaurants, hotels and shops that serve them.  

Historic preservation projects are also a fiscally responsible reuse of the infrastructure investments that have already been made.  Instead of creating a new office park on a green space, with the associated infrastructure costs to the city and county, there is the option to rehabilitate an existing building and take advantage of the investment that previous generations have already made; use the transportation system that’s already in place to reduce the need for new parking.

While there are clear economic benefits to a historic preservation or rehabilitation project, there is often the concern that it is just too expensive. There are remediation costs, increased costs for specialty skilled labor and limited loan opportunities from traditional banks. The good news is that there are a variety of funding sources out there than can help to address these gaps. At the federal level there is the Federal Rehabilitation Investment Tax Credit (FRITC) and the New Market Tax Credit (NMTC).

The FRITC is specifically for income-generating rehabilitation projects of designated historic buildings and buildings listed as contributing to a historic neighborhood, and qualifying properties receive a tax credit equal to 20% of the rehabilitation expenses. For projects that are located in deteriorated areas and low-income communities, the NMTC attracts private capital by permitting investors to receive a tax credit against their federal income tax in exchange for making equity investments in specialized financial intermediaries called Community Development Entities (CDEs). At the state level, there is the State Income Tax Credit for Rehabilitation of Historic Property, which allows eligible participants to apply for a state income tax credit value up to 25% of rehabilitation expenses, with different per project and overall caps based on project types. Then finally there is the State Preferential Property Tax Assessment for Rehabilitated Historic Property, which freezes the county property tax assessment for more than eight years, provided the owner increases the fair market value of the building by 50% to 100%. This is not a complete list of all available funding sources for historic preservation projects. There are also Transportation Enhancement funds, Georgia Cities Foundation loans and other local funding sources. So while it may seem daunting at first, there are a variety of funding sources in place to support historic preservation projects.

Taken altogether, it’s clear why historic preservation and the UDC is an important issue for not just Atlanta’s future mayor, but all local leaders. Historic preservation and rehabilitation projects have one of the best returns on investment to the local economy in the form of visitors, jobs, income and taxes — far better than new construction or manufacturing. They are also an efficient use of our preexisting investment in our buildings and infrastructure. However, it takes local officials with the foresight and abilities to identify historic buildings of significance, the support to develop a comprehensive plan for their protection and the power to enforce it.

Related posts

96497